LONDON (AFX) - French and Italian wines are seeing UK off-trade sales improve as younger consumers show interest in Old World wines from Europe.
Speaking at a presentation by wine trade fair organiser Vinexpo on 20-25-year-olds and their relationship with wine, Tesco buying manager Kevan Smith said it is a particularly exciting time for wines from France and Italy, as more sophisticated consumers begin to explore the diversity on offer.
“After a long period of doom and gloom, it's now gone into positive,” said Smith.
Sales of French wines, in particular, have suffered heavily in the UK as New World producers, namely Australia, have captured an increasingly large slice of the 4.3 billion sterling market.  Australia now leads off-trade sales in the UK, with 23.9% market share at end of 2006, valued at 1.057 billion sterling, according to data from AC Nielsen. France saw its wine sales increase 0.9 % in value over the year to 765.8 million sterling, though market share dipped slightly to 17.7%.
Smith said it is too early to tell whether Australian wine sales are beginning to suffer as a result of the French renaissance.  “Hopefully everyone can grow together,” he added. “'Certainly we are not seeing the New World slowing down.”
But data from the Australian Wine and Brandy Corporation showed export volume and value stumbling in the middle of 2006, volume dipping 2% in the 12 months to end-September and value down 3%. The industry is in for more tough times as it contends with ongoing drought and water shortages in the engine room wine-growing regions of Australia -- Riverland, Murray Darling and Riverina.